IVA only way out?

mat1979

Hello

I have a couple of questions if you dont mind...

My circumstances are this;

My total outgoings are pretty much exactly what I am earning, give or take 1-200.

At this rate my debts which include £9500 on a CC and £3000 on an overdraft will not be paid off for a very very long time.

I have calculated that a loan of £14000 would consolodate the debts and cost £399 a month which would pretty much equal what I am paying out now but would mean I am debt free within 4 years. Happy days.

I have been refused 2 loans, which is unbelievably frustrating!

So I turned to debtadvisorycentre.co.uk who have said that they canf reeze my debts and have them paid off within 6.5 years with an affordable amount or sooner if I choose to pay more.

I can open an RBS bank account which will be split into 2 with my pay cheque going straight into in and then all payments coming out of it with the leftover money being put into a "spending" account.

This seems like the ideal choice as the debt will be reducing, at a faster rate, I wont be bouncing off the end of my overdraft every month and I wont be paying any more interest any more.

So my question is, is this something anyone else has any experience of? What pitfalls should I be looking out for?

Thanks in advance!

Mat

mat1979

Oh and they aren't offering to write any debt off it's purely stopping interest, and negotiating with them a payment period. Including the overdraft. Hence the new bank account. I was told that if I have any letters threatening legal action that I should forward them to them and they will deal with them. Is this really the case in anyones experience?

Thanks
Mat

Deep_In_Debt

One of the pitfalls is the Debt Advisory Service who no doubt will be charging you a fee for their "services".

CCCS, Payplan and CAB all offer free advice and will act in your interest and not theirs and therefore you are likely to be debt free a lot sooner than 6.5 years as ALL your money will be going to pay your debts and not lining their pockets by way of monthly fee.

There is no guarantee that interest will be frozen; creditors are not legally obliged to do so. That said, they mostly do.

Deep_In_Debt

Meant to say, sounds more like a dmp and not an IVA and there is no reason to pay for a dmp since these are not legally binding by any party. You can do a dmp yourself and negotiate with creditors yourself. National Debtline website has some good advice and some template letters you can use.

I'm on a dmp with CCCS and have been for the last 3 years and will be debt free in less than 2 years (sooner if I have my way). Creditors have kept interest frozen even now although I've had to re-negotiate with them.

Open a bank account with a bank that you do not have any debts with or who is not linked to any of your creditors...doesn't have to be RBS but make sure it is a basic account and not none that comes with credit facilities.

BigCraigJohn

Debt consolidation is a bad idea, best nip it in the bud now, its a vicious circle and getting out the loop is a good idea. Some sort of DMP is probably the best way. Depending on your personal circumstances it can be best to default and let them terminate the debts so the balances are frozen and dead where with a DMP from the outset the account might still be active and therefore they can do what they like really interest wise, if its defaulted you'll probably be repaying a DCA which is not such a bad thing as you might be able to get a reduced settlement.

CH27

Do not pay for a DMP. Use CCCS or Payplan.